As next week’s made-available to trade deadline for mandatory SEF trading draws near, Bloomberg SEF LLC announced that NISA Investment Advisors, LLC and Credit Suisse Securities (USA) LLC executed the first-ever sponsored access model trade with Goldman Sachs.
NISA was able to execute the trade on Bloomberg SEF through Credit Suisse serving as the FCM, with Goldman Sachs serving as the liquidity provider. The sponsored access model is a way to facilitate the regulatory transition for buy-side firms as they comply with the CFTC mandates.
“For our firm and clients, sponsored access is the preferred execution approach for accessing the swaps market,” stated Ken Lester, NISA’s managing g director of portfolio management in today’s release. “Bloomberg was the first SEF to provide sponsored access capability to NISA,” stated Lester. St.
Based in St. Louis, NISA is an independent investment manager for institutional investors specializing in investment-grade fixed income, derivative overlays and index-like equity investments.
The first mandatory trade deadline falls on Saturday, Feb. 15, and with the President’s Day holiday on Monday, Feb. 17, buy side firms will get a few more breathing days until Tuesday Feb. 18th.
“Many clients are planning to utilize this structure to prepare for next week’s made-available-for trading deadline, following NISA as the first to trade cleared swaps through this framework,” said John Dabbs, head of Credit Suisse’s US Futures Commission Merchant Group.
While some large buy-side firms have invested in infrastructure to connect directly to SEFs, FCMs are reportedly offering their clients alternative ways to access the swap venues for required transactions.
"Clients concerned by next week's made-available-for-trading deadline now have another option for accessing our SEF's liquidity," commented Ben Macdonald, Bloomberg's Head of Product and President of Bloomberg's SEF in today’s release. "By providing market participants access to our SEF through an agency model, much like the futures market has done for years, we offer our clients greater trading flexibility and efficiencies, " stated Macdonald.
Goldman Sachs was on the other side of the NISA trade. “Goldman Sachs continues to provide best-in-class execution to our franchise as market structure evolves,” commented Scott Rofey, Head of U.S. Dollar Interest Rate Swap Derivatives at Goldman Sachs. “Providing liquidity to direct-market access clients of Bloomberg’s SEF is one way we are helping our clients manage the transition to new methods of electronic market access,” added Rofey.
More than 600 global firms, including all major liquidity providers, have signed on to use Bloomberg’s SEF, according to the firm, adding that over $1 trillion in cross asset volume has been executed since the October launch.